Rebecca Dalli Gonzi, Simon Grima, Murat Kizilkaya and Jonathan Spiteri. | Journal of Risk and Financial Management. 2019, 12, 169.
Originality/value—this model contributed to the vast literature on models of change and risk management within organisations, but was not validated empirically for reliability of the factors, and on financial services providers within small jurisdictions. Therefore, the significance and importance of such a study lies firstly on the premise that testing on small countries can be deemed as small laboratories for more complex politics, regulations and policies of larger countries and secondly, the importance of financial services as essential for prosperity in a country’s economy. This model will provide an empirically tested proactive model in a specific environment for managing organisational risks to arrive at their objectives with minimal setbacks.
In general, organisational problems that call for large-scale change happen under hard or unexpected circumstances that require a rapid recourse to action. However, in such cases protocols for operational standards in a crisis are set in motion only when the department or organisation concerned is under extreme strain. In this paper the authors sustain that in many instances a department is under strain long before anyone in the organisation acknowledges it, thus causing an undesired impact on staff and other resources, making it difficult for any change to happen in response to what is required. The reasons for this could be many, ranging from bureaucracy to a ‘laissez faire’ attitude, to authorities demanding expectations that are beyond the department’s capacity to achieve the desired output.
Changes in the environment can cause a threat to any significant entity, which affects the complex delivery of a service. For instance, the impact of the 2011 London riots, Europe’s cold temperature spikes and its impact on civilians, the Libya Crisis as affected by Malta in 2011, and irregular migrant arrivals in Spain in 2018, as each scenario is conditioned by sudden external change that cuts through several strategic areas requiring a rapid response similar to those used in pandemic situations and extreme crisis calls.
In her book, Dalli Gonzi (2019), presented 8 factors to assist an organisation in recognising that a response to identify the strain and to be equipped to cope with change is what current management practice should aim towards. In supporting operational environments, she examines and discusses how the 8 elements support the system by providing (a) a just-in-time response; (b) identifying the strain under which the organisation is subject to; (c) and the tangible outputs to operations. To build her model, otherwise referred to as the Dali model, she used case studies, books, publications, journals, online material including online interviews and their transcripts and literature, together with interviews, and surveys that she carried out separately. The basis and the buildup of this tool are elaborated on in the literature review section below (Dalli Gonzi 2019).
This model contributed to the already vast literature on models of change and risk management within organisations (see literature review below), but was not validated empirically, and on financial services providers within small jurisdictions. Therefore, the significance and importance of such a study lies firstly on the premise that testing on small countries, similar to what has been carried out in the past by various authors of the likes of (King 1993; Briguglio 1995; Baldacchino 2006; Bezzina and Grima 2012; Bezzina et al. 2014), can be deemed small laboratories for more complex politics, regulations and policies of larger countries and secondly, the importance of financial services as essential for prosperity in a country’s economy.
Therefore, this study will provide us with an empirically tested proactive model (in a specific environment, i.e., financial firms within small jurisdictions) for managing organisational risks to arrive at their objectives with minimal setbacks.
In this study we refer to small jurisdictions as countries with fewer than 3 million inhabitants. In this case, the European Union (EU) states of Latvia, Lithuania, Estonia, Slovenia, Cyprus, Malta and Luxembourg are selected. Moreover, we refer to banks (credit institutions), investment services firms, insurance firms and financial institutions as financial services organisations (Kruf et al. 2019)